What's Keeping a Lid on Precious Metal Prices?

How Do Miners’ Technicals Look in 2018?

By Meera Shawn
|
Feb 14, 2018 8:02 am EST

Mining stock analysis

Miners had a good start to 2018, as they saw an upswing in prices due to the revival of precious metals. However, as the precious metals slumped, so did the mining stocks. This article will focus on miners and their technical indicators including RSI levels and implied volatility. The miners we’ve selected for our analysis are Randgold Resources (GOLD), Yamana Gold (AUY), Kinross Gold (KGC), and Eldorado Gold (EGO).

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All these four miners have experienced a slump in price over the past 30 trading days. GOLD, AUY, KGC, and EGO dropped 14.5%, 1.6%, 6.5%, and 9.5%, respectively.

Mining funds such as the VanEck Vectors Gold Miners (GDX) and the iShares MSCI Global Gold Min (RING) have seen falls in their prices during the past one month. They have dropped 8.7% and 10.4%, respectively, on a 30-day trailing basis.

Volatility analysis

Implied volatility is a measurement of the price changes in precious metals given the fluctuations in the prices of their call options. GOLD, AUY, KGC, and EGO have implied volatility figures of 30.9%, 53.6%, 50.9%, and 75.3%, respectively.

RSI readings

A stock’s RSI (relative strength index) level indicates whether it is overbought or underbought. When a stock’s RSI level is higher than 70, it shows that the stock could be in overbought territory and that its price could fall. When a stock’s RSI level is lower than 30, it indicates that the stock could be oversold and that its price could rise. GOLD, AUY, KGC, and EGO have RSI levels of 19.2, 36.6, 32.5, and 32.8, respectively.